Why The Net Is NOT Dead

Things are grim financially for dot-coms.

Well…duh.

You can’t try to make millions of dollars out of thin air, although
it’s a pleasantly optimistic thought. What it ends up boiling down to
is that when some people are making money out of thin air, some
people’s money is disappearing into thin air. This has absolutely,
absolutely nothing to do with the viability of the Internet or
high-technology — but more on that in a bit.

I had an interesting set of conversations with some friends lately
where we were attempting to fix the blame for the rollercoaster ride
that has been tech stocks for the last few years: at first I wanted to
blame individual investors. Individualized trading has without a doubt
completely changed the economic landscape…and I think it’s for the
worse. Institutional investors spend their whole careers on the market
and have a solid grasp of the companies involved and their
technologies. They make investments based on careful analyses and
poised thought and they can see through superficial press
releases. Individual investors tend to have day jobs and do a little
trading on the side. Consequently, they don’t have time to acquire a
detailed understanding of the markets they are trading in. This, in
turn, leads them to be subject to believe every last press release,
rumor, and hype around a company or industry. This is NOT healthy for
the market.

BUT, the argument goes further (courtesy of my friends), why are they
investing? Well, because they can, courtesy eTrade, Datek, Ameritrade,
and such kin — and such firms have gone out of their way to tell
people that they can make LOTS of money by investing in the market,
encouraging millions of Americans to begin individual trading. So, to
a significant degree they are at fault.

But, it was pointed out, there is a culprit even beyond them, a
culprit clearly at fault for the whole situation: mass media.

Even at the start, when things were beginning to really explode and
Jupiter and Forrester began releasing their reports on growth full of
hyperbole and optimistic exaggeration, technologists felt a flattered,
but a little uneasy. It was clear from the start where it would all
go: overhype always leads to a perceived crash. It’s what the media
likes. It’s their formula.

Take some X (‘X’ being a person, industry sector, company, or
technology) that is doing reasonably well. Hype up X until you’ve
gotten everyone very excited about it and convinced it’ll
revolutionize the planet; tell people you knew all the time that X was
going to be great. Supporters of X won’t fight against the unmerited
attention – who would do that? Then, after a little pause, begin to
question the popularity of X and its long-term viability. Meticulously
and warily document “the rise and fall of X” — people dislike, but
usually trust, skeptics. Sure enough, X will find it has begun to lose
some favor with investors and partners and can’t really oppose the
decline, since the overhype was never really justified in the first
place. The whole giant perceived rollercoaster of X may have
absolutely nothing at all to do with X’s true viability.

This is, indeed, exactly what we saw happen with the Net. It’s doing
just fine, thank you. Next-generation applications are still be
advanced and deployed. It is, currently, no future hype or hyperbole
needed, really frigging incredible. In fact, I just wrote a little bit abouthow Google is now an extension of my brain. This is the here and now.

Internet usage continues to grow – broadband is rapidly penetrating in
Europe, which should really shake things up: due to high billing of
local toll calls (as previously mentioned by many other folks) people
don’t have “always-on” Internet access. Flat-rate broadband is going
frigging tear through the European continent. And did I mention the
fiber-optic utility play that’s going to take everyone by surprise in
the next few years?

The Net is doing just fine, thank you very much. Yes, stocks are
tanking. Yes, dot-coms are getting trashed by the media. Yes, people
(my best friend included) are getting laid off. Yes, the easy money is
gone. Does that have anything to do with the quality of the
technology, the progress of its advance, or even its popularity?

No.

Maybe the giant profits will come later. Maybe the gleaming reporting
will come back. Mabye investors will flock again to dot-coms soon. But
in one sense, I don’t really care. I’m a technologist; I’ll figure out
how to pay rent. Let me and my brethren (and sistren) build and get
out of the way with your silly news articles.

Ladies and gentlemen, the death of the Internet has been greatly
exaggerated.